GRP Division Proposed Fiscal Year 2020 Operating Budget: Budgeting - PowerPoint PPT Presentation

GRP Division Proposed Fiscal Year 2020 Operating Budget: Budgeting During Uncertainty GRP Review Committee SJRA Board Meeting May 20, 2019 May 23, 2019

Joint GRP Participants • 80 GRP Contracts • 149 Large Volume Groundwater User (LVGU) Systems

Current GRP FY 2019 Rates • Groundwater Pumpage Fee $2.64/1000 gal • Treated Surface Water Fee $2.83/1000 gal Budgeted Total Demand = 52.72 MGD or 19.24 billion gallons Treated Surface Water Production = 12 MGD Annual Average

Budgeting During Uncertainty FY 2020 Budget and Rate Development Goals Develop the FY 2020 Operating Budget following a • concept of responsible management of $500 MM GRP assets. Produce 12 mgd of surface water and deliver to 7 • Participants. Develop a GRP Pumpage Fee and Surface Water Fee • assessed to meet revenue requirements.

Uncertainty? Maybe Not TWDB Rejects Lone Star Groundwater Conservation District’s Draft Management Plan

Compliance Overview 14.5 14.0 13.5 Billion Gallons 13.0 12.5 12.0 11.5 11.0 10.5 10.0 2016 2017 2018 Projected 2019 Projected 2020 5-Year Average Groundwater Demand ICO Adjusted TQD

Impactful Changes to FY 2020 Operating Budget Reduction in Expenses Increase in Expenses • Quantity of GAC Changes • Chemicals • Three vacant FTEs • Maintenance Contracts • Professional Services • Cost of GAC Change Outs • City of Houston Water Reservation Fee Revenue Impacts • Reduction in Projected Demands • Anticipated Uncollected Revenue

FY 2019 Budget/Projections (As of April 2019) Category FY19 Budget FY19 Projected Operating Revenues $ 53,193,280 $ 49,237,025 Other Revenue $ 14,808 $ 14,808 O&M Expenses $ 19,116,988 $ 16,905,000 Debt Service $ 34,525,702 $ 34,525,702 Capital Items/Prepaid COH Credit $ (399,867) $ (399,867) Change to Fund Balance $ (34,735) $ (1,779,002) * Change to Fund Balance does not include uncollected revenue.

GRP Water Demands 25.00 3.45% Decrease in Budgeted Demands 20.00 Billions of Gallons 15.00 10.00 5.00 - FY 2017 Actual FY 2018 Actual FY 2019 Budgeted FY 2019 Projected FY 2020 Budgeted Groundwater Surface Water

GRP Operating Revenue $70 $60 $50 Millions $40 $30 $20 $10 $0 FY 17 FY 18 Projected FY 19 Budgeted FY 20 Budgeted Actual Collected * Total uncollected revenue (FY 17 through April 2019) = $3,074,387 ** Projected uncollected revenue for FY 2020 = $1,726,605

GRP O&M Expenses Category FY18 Actual FY19 Projected FY20 Budget Payroll & Employee Benefits $ 4,764,748 $ 4,400,000 $ 4,544,712 Professional Fees $ 733,911 $ 1,000,000 $ 901,500 Purchased & Contracted Services $ 1,657,632 $ 1,772,000 $ 1,765,719 Supplies, Materials, & Utilities $ 9,115,771 $ 8,604,000 $ 9,109,820 Maintenance Repairs, Parts & Rentals $ 1,013,369 $ 702,000 $ 1,061,750 General & Administrative $ 405,005 $ 427,000 $ 476,390 $ 17,690,436 $ 16,905,000 $ 17,859,891 Total GRP O&M Expenses * FY19 & FY20 are based on a surface water production rate of 12 MGD.

GRP O&M Expenses $10 $9 $8 $7 $6 Millions $5 $4 $3 $2 $1 $- Payroll & Professional Fees Purchased & Supplies, Maintenance, General & Employee Contracted Materials, & Repairs, Parts, & Administrative Benefits Services Utilities Rentals FY 18 Actual FY 19 Projected FY 20 Budgeted

GRP Rate Composition Uncollected Payroll & Employee Revenue Professional Fees Benefits 3.2% 1.7% 8.4% Purchased Services 3.3% Maintenance, Repairs, Parts Supplies, Materials & & Rentals Utilities 2.0% Bond Interest & 16.8% Principal 63.7% General & Administrative 0.9% Capital Improvements 0.1%

FY 2020 Debt Service TWDB Open Market Total Principal $ 11,771,667 $ 2,590,000 $ 14,361,667 Interest $ 16,743,734 $ 3,431,350 $ 20,175,084 Total $ 28,515,401 $ 6,021,350 $ 34,536,751

Operating Fund Balance (As of August 31 st ) $12 Emergency = $0 $10 R&R = $0 $8 Millions $6 $4 $2 $0 FY 2017 FY 2018 FY 2019 FY 2020 Target Actual W/Uncollected Revenue Projected * Proposed changes to reserve structure and targets are included, starting in FY 2020.

$5.00 Rates 4.30 0.45 $4.00 3.85 Proposed Proposed 3.15 Equivalent Per 1,000 Gallons Proposed 2.88 0.42 $3.00 2.73 2.83 0.19 2.64 $2.00 Current Current $1.00 $0.00 GRP GRP Equiv. Blend Rate NHCRWA NHCRWA Surface Water Groundwater 35%SW/65%GW Groundwater Surface Water

Proposed FY 2020 Rates • Groundwater Pumpage Fee $2.73/1000 gal • Treated Surface Water Fee $3.15/1000 gal

2019 Regional Rate Comparison $5.00 $4.50 $4.30 $4.00 $4.00 $3.85 Per 1000 Gallons $3.50 $3.65 $3.35 $3.00 $3.15 $2.95 $2.50 $2.73 $2.00 $1.50 $1.00 $0.50 $- Proposed SJRA Rate Current WHCWA Rate Current NHCRWA Rate Current NFBWA Rate Groundwater Surface Water

Questions?

Amended Rate Order for Participants • Rates – Groundwater Pumpage Fee $2.73/1000 Gallons – Treated Surface Water Fee $3.15/1000 Gallons * Rates effective September 1, 2019 • Definitions • Conservation District Permitting